Stricter rules will apply to cryptocurrency services in the UK, including a “cooling-off period” for novice investors and a restriction on “refer a friend” bonuses.
As of October 8, the Financial Conduct Authority (FCA) of the United Kingdom has issued tighter rules for those who offer cryptocurrency services there. These restrictions, which include a “cooling-off period” for first-time investors and a ban on “refer a friend” bonuses, are meant to increase investor knowledge of risks.
Sheldon Mills, the executive director of consumers and competition at the FCA, claims that studies demonstrate that people frequently express remorse over impulsive crypto purchases. The new regulations are designed to give people enough time, accurate risk warnings, and information to enable them to make wise decisions.
In the statement, Mills added:
“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”
According to the new rules, cryptocurrency businesses in the UK are required to confirm that potential investors have the knowledge and experience needed to make crypto investments. Additionally, those who promote cryptocurrencies must assure fair, lucid, and non-misleading advertising and offer transparent risk warnings.
The FCA’s most recent announcement is in line with the limitations put in place for advertising high-risk investments last year. The consultation process is open to interested parties until August 10 and the regulatory body is also looking for feedback on new rules for crypto marketers.
The FCA’s dedication to defending consumers and encouraging ethical behavior in the cryptocurrency industry is reflected in these tighter restrictions. The FCA wants to make sure that people have access to the right information and safety nets when making cryptocurrency investments, therefore it has tightened its regulations for advertisements.